The dash to cash has only just begun. Here's what that means for stocks and bonds.

MW The dash to cash has only just begun. Here's what that means for stocks and bonds.

By Steve Goldstein

JPMorgan finds investors were far quicker after Russia's invasion of Ukraine to build up cash than they are now

Investors have just begun a dash into cash, according to a JPMorgan analysis.

Nearly a month into the Iran conflict and the amazing thing is how little markets have changed, despite some 20% of the world's supply of oil being offline.

Strategists at JPMorgan led by Nikolaos Panigirtzoglou have a clever way of measuring how much cash investors have. They look at the M2 measure of money supply and pit that against stock of all financial assets, excluding that held by central banks, FX reserve managers and commercial banks.

The finding is that private investors are increasing their cash reserves, but not by much. The chart tells the story, finding the buildup of cash is nowhere near that which followed Russia's invasion of Ukraine in February 2022. Similarly, the bank's measure of equity positioning has receded from the January peak of the 81st percentile down to the 62nd percentile - which nonetheless is way above the 18th-percentile low in May 2022.

The strategists first examine the reason for the buildup in cash. The reason is the concern that central banks will make a policy mistake by tightening into a supply shock, before loosening next year.

If the inflation impulse is the result of a supply shock, "central banks should in principle accommodate rather than respond to this shock provided long-term inflation expectations remain well-anchored, though for central banks that faced persistently elevated inflation heading into the shock the picture is more nuanced," the JPMorgan strategists say. Those long-term expectations are anchored, the strategists find, looking at both market prices and surveys.

The supply shock is beginning to show up in data. The flash services purchasing managers index for March deteriorated, and the performance of cyclical stocks versus defensive sectors has been declining.

The strategists say that still-low cash allocations present a headwind to both stocks and bonds going forward, as long as geopolitical and macro uncertainty remain elevated. However, they do find a little solace for stocks at least, because rebalancing flows from multiasset investors implies some $65 billion in equity buying and equivalent selling of bonds once the first quarter ends.

The markets

U.S. stock-index futures (ES00) (NQ00) slumped as oil prices (CL00) rose. The yield on the 10-year Treasury BX:TMUBMUSD10Y rose 6 basis points to 4.38%.

   Key asset performance                                                Last       5d      1m       YTD     1y 
   S&P 500                                                              6591.9     -0.50%  -5.10%   -3.70%  15.40% 
   Nasdaq Composite                                                     21,929.83  -1.00%  -5.28%   -5.65%  22.52% 
   10-year Treasury                                                     4.376      12.30   36.80    20.40   1.00 
   Gold                                                                 4420.5     -4.97%  -15.01%  2.04%   44.03% 
   Oil                                                                  93.53      -1.12%  42.88%   62.92%  33.79% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Iran maintained what Lloyd's List Intelligence called a tollbooth regime over the Strait of Hormuz as diplomatic efforts didn't generate any tangible results. The Pentagon is developing military options for a final blow in Iran that could include the use of U.S. ground forces, according to an Axios report.

Data on initial jobless claims are due at 8:30 a.m. Eastern time as Fed governor Lisa Cook gives a speech on financial stability that starts at 4 p.m., just as the stock market closes.

There's a $44 billion auction of 7-year notes, following two lackluster-to-poor auctions earlier in the week.

Corebridge Financial $(CRBG)$ and Equitable $(EQH)$ will combine in an all-stock deal the companies say values the combined business at $22 billion, with Corebridge shareholders getting 51% of the new company.

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The chart

This chart from Citrini Research illustrates the explosive growth of OpenClaw, an open-sourced library that allows AI to execute tasks autonomously. The chart, sourced by OpenRouter, tracks weekly token usage from OpenClaw versus everything else. The research firm put together a list of companies exposed to the phenomenon, including Ciena $(CIEN)$, Cisco Systems $(CSCO)$ and VeriSign $(VRSN)$.

Top tickers

Here were the most popular stock-market tickers on MarketWatch as of 5 a.m. Eastern.

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   GME     GameStop 
   MU      Micron Technology 
   MSFT    Microsoft 
   INFY    Infosys 
   TSM     Taiwan Semiconductor Manufacturing Co. 
   AMD     Advanced Micro Devices 
   PLTR    Palantir Technologies 
   AMZN    Amazon.com 

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BEYOND THE NEWSROOM

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-Steve Goldstein

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March 26, 2026 06:52 ET (10:52 GMT)

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